Standing Committee B

[Mr. Nigel Beard in the Chair]

Enterprise Bill

Clause 4 - Annual and other reports

Amendment proposed [this day]: No. 3, in page 2, line 24, at end insert– 
'(c) a detailed summary of OFT decisions and investigations over the preceding year'.–[Mr. Waterson.]
 Question again proposed, That the amendment be made.

Nigel Beard: I remind the Committee that with this we may take the following amendments: No. 4, in page 2, line 24, at end insert–
'(d) an assessment of the additional costs to business of the exercise of its functions.'.
 No. 2, in page 2, line 26, at end insert– 
'(3A) The Government will arrange a debate in each House of Parliament on the annual report within three months of its publication'.

Nigel Waterson: On a point of order, Mr. Beard. I welcome you to the Chair. It would be appropriate at this early stage to ask the Under-Secretary for some guidance. As with many such Bills, there are provisions under which significant regulations will be made. It was helpful to have the stop now orders guidance from the Office of Fair Trading on Second Reading. Can the Under Secretary say now, or let us know later, when draft regulations may be available for the different stages of the Bill? There is little point in receiving them on the day of the debate.

Nigel Beard: Would the Under-Secretary like to reply?

Melanie Johnson: Thank you, Mr. Beard. I join the hon. Gentleman in welcoming you to the Chair. I appeared before you more often when you were a member of the Treasury Committee, so it is pleasant to see you in the Chair of this Standing Committee.
 I shall reflect on the answer to the hon. Gentleman's question, as many things might be affected by it. There are matters that need to go to Committees in the other place and we shall consider what the time scales might be. I am minded to help the Committee as far as I can to get information to hon. Members in advance of the debate, rather than on the day that it takes places, as that is next to useless to members of the Committee. It would be useful to know if there was anything that hon. Members wanted to see in advance, although I cannot promise that I shall be able to respond to their requests. However, I will at least know what hon. Members think would be useful to have in advance of our discussions.

Nigel Waterson: Further to that point of order, I am grateful for the Under-Secretary's invitation. An obvious, and major, example is clause 202, which, under the new programme, we will reach quite quickly. There is much speculation by consumer organisations about the regulations that will be made in that clause, which we will probably debate at our next sitting on Thursday or on the following Tuesday. We need to have the information in good time for the debate but it would be useful if it could be circulated to the bodies that are intimately involved in the Bill.

Nigel Beard: The Minister has taken note of the hon. Gentleman's request.

Melanie Johnson: Further to your remarks, Mr. Beard, and those of the hon. Member for Eastbourne, work in relation to clause 202 is in preparation and it might be possible to lay that before the Committee by the end of the week. I hope that that will help hon. Members, and not prejudice the speed with which the Committee moves.

Nigel Beard: When the Committee adjourned this morning, Mr. Djanogly had the floor.

Jonathan Djanogly: As I was saying this morning, concern for costs is imperative; sometimes it is a life-and-death issue for small companies. In the example that I gave, a small company, together with a couple of larger companies, started trading in a new market. A letter was received from the Department of Trade and Industry maintaining that the trade was against the public interest and, effectively, threatening to wind up the company and prosecute the directors. The directors naturally went to a solicitor who took them to a leading counsel, whose opinion was that the company was not trading against the public interest and that if they took the matter through the judicial process, the directors would have a very good chance of trading on.
 There was a problem, however. The director concerned could not afford to go through the process that would have been required to clear the company. The matter never went to court because the director settled with the DTI, the company was wound up and various other measures were taken. 
 If there had been a judicial process, the director might have lost his case. No one can say for sure what the outcome would have been, but what is sure is that any rational business man in his situation would have followed the same course. He had the choice of going through a judicial process that would have taken years and probably bankrupted him as well as the company, or of taking the easy option of agreeing with the DTI, initiating a settlement, getting out of the business and starting a new one. 
 Let us be frank; that is how most business men think. They do not have time to spend years instructing lawyers. They do not want, or have time, to argue against Government; they want to get on and earn a living. In this debate, we are often talking about the rights of consumers, but it is important to realise that tens, if not hundreds, of thousands of small business men are daily trying to make a living as best they can, free from regulation. When the Government 
 are oppressive, that can kill their business without the matter ever going to court, because of the cost. That is why I have used this example. 
 Of course, such examples directly concern the DTI, but what is there in the Bill to show that a new, further empowered OFT will be any better than the DTI can be? I shall return to that theme in various ways as we go through the Bill, because all too often in its provisions we see regulation at a cost to the public purse and without adequate accountability. We see regulation adding to the cost of companies, but that cost is not revealed and they are not allowed to have redress against what an overbearing Government might do in certain circumstances. 
 We must also realise that in this modern age, the age of the media, newspapers are often looking for stories, and there is always the threat that stories or, worse, bits of information will get out to the press, particularly with regard to consumer issues. We will increasingly face the syndrome of trial by media, and the costs to companies may be even more stratospheric. For all those reasons, the amendment is worthy.

Mark Field: I entirely agree with my hon. Friend the Member for Huntingdon (Mr. Djanogly) about trial by media. Such issues will no doubt play an important part in later discussions, particularly on clause 11.
 Before entering this place, I had a brief, meteoric career as a corporate lawyer. I am certainly nowhere near as accomplished as my hon. Friends the Members for Eastbourne and for Huntingdon. In fact, for the last eight years before I became a Member of Parliament, I ran my own small business; I am thankful that at no stage did the OFT investigate us. 
 I have an important point to make, as someone who has experience of the paralysing effect on business of investigations by the OFT and other regulators. Such investigations are unlikely to affect companies with a dozen or so employees. My concern is that a large investigation may have a paralysing effect especially in specialist sectors that may be subject to an OFT type of inquiry. Such companies will not be much larger; they may have 30 or 40 employees, but will not have the massive infrastructure of many of the international companies who doubtless will have been in direct touch with the Ministry and who will have the protection of that infrastructure, with large regulatory and personnel departments and an enormous number of internal auditors. 
 The amendment deals with the costs involved in such investigations. Not only is such an investigation costly, it has an affect on the recruitment of new staff across the board. The company cannot take advantage of potential opportunities in its own marketplace for several months. There is increasing step-by-step regulation under this Government, and I ask them to step back occasionally to consider the amount of regulation that they are imposing on companies. 
 There are often invisible costs, in addition to the large-scale visible ones. Specialist lawyers and financial PR companies are often needed to minimise financial or economic losses because of the increasing trial by media to which my hon. Friend the Member for Huntingdon referred. How can those costs be assuaged? Does the Under-Secretary also recognise that the sheer inconvenience to businesses of OFT or other regulatory inquiries should be minimised as far as possible?

John Pugh: I want to make a negative point about the amendments, although no one can object to amendment No. 3 and the concept of OFT decisions and investigations being paraded for all to see. If that were done correctly, it might make amendment No. 4 unnecessary. A good and accurate list of the work of the OFT will be one of two things; a list of successful remedies applied and rights wronged, or a list that shows several futile and time-consuming investigations. If it is the latter, it is a waste of Government as well as business funds and demands urgent remedy. If it is the former, the cost to business is not a convincing argument.
 As I said, it will be difficult to assess true business costs where the OFT is investigating businesses with rigour or is investigating consumer affairs on behalf of the consumer. It is acknowledged that many of the costs are opportunity costs. It is not like the minimum wage, where one can say fairly, accurately and briefly what the cost to business will be. Although there are mechanisms for regulatory assessment, I am not convinced that the mechanism will be uncontestable and easily agreed between the OFT and the businesses concerned. Neither am I convinced that there is an easy way of assessing the costs. 
 Any method that will accurately establish the cost to business of being correctly observed and investigated by the OFT will be time-consuming. Some of that time will be spent by firms answering questions put to them by the OFT about the investigations that the OFT has conducted. There can be nothing more irritating for a firm that has been investigated with some rigour than to have to fill in another form asking, ''How was it for you?'' and requesting evidence over many pages about how the arrangement went and what it cost. There is no argument in principle against assessing what the business costs will be, but there is a caution about the practice. It would be nice in general, and a good thing in principle, to have some idea of the business costs.

Nigel Waterson: Is it not all rather simple? One goes to a company and simply asks what the costs o he investigation were for it. The company can send in its lawyers' fees and the costs can be re-submitted. I do not think that it is that complicated.

John Pugh: If the hon. Gentleman had listened to me earlier, he would realise that I said that much of the costs were opportunity costs. If it was just a question of lawyers' bills, it would be extremely straightforward, but we will hear about management time taken up in dealing with the issue. In the case of
 big firms with highly paid managements, that is an appreciable cost. It is a lost opportunity cost to them and establishing and quantifying that will never be easy. Although I am in favour of the principle of amendment No. 4, it may achieve less than one thinks and cost more than one imagines.

Vincent Cable: I welcome you to the Chair, Mr. Beard. I apologise for missing the last section of the discussion. I certainly do not want to waste the Committee's time by duplicating comments that have already been made. Since amendment No. 3 stands in my name, I feel that I should say a little about the rationale behind it. I should also like to say a few words about all the amendments in the group.
 It is extremely important to have specific reporting on each of the major decisions that is made by the OFT and that the annual report does not contain just a general statement in the annual report of what it did, but a specific analysis of why particular decisions were reached. There are two reasons for that. First, part of the spirit of the legislation should be about transparency. As Members of Parliament, we can inject two elements into the debate; accountability and transparency. We should always insist on transparency and make it clear why decisions have been reached. That is important partly for people who are out in the markets and in companies who are trying to anticipate what will happen if they go into a merger or takeover. They need to understand the thinking of the board and the Director General of the OFT. The only way of assessing how that thinking is evolving is by understanding, case by case, how decisions are reached. 
 The Bill sets out some general principles such as competition, which is fine, but there are tough choices to make in determining competition. How does one balance competition against monopoly in cases where there are innovations? How does one deal with a takeover case involving a natural monopoly such as a regional electricity company? The thinking of the OFT will be clear only case by case. It is important that it reports in detail, publicly, on the rationale behind its decisions. 
 The second reason why reporting is important is because we need some performance measure of the board and the director general. We should have some basis for assessing how well they are doing their jobs. I was not entirely clear from some of the answers that the Minister gave this morning about what the executive board would do. I got a sense that it would be involved in individual decisions. There may be split votes on some of those key merger and takeover decisions. If that were the case, as with the Monetary Policy Committee, it would be important for transparency, clarity and understanding that the outside world, particularly the business that is involved in takeovers, understood where the different members of the OFT were coming from. That can be done only through transparency and by setting out, case by case, how decisions have been reached. 
 I take a slightly different tack on amendment No. 4 from my hon. Friend the Member for Southport (Dr. Pugh). I do not want to open up splits in the Liberal Democrats over clause 4, but I am rather more 
 sympathetic to some of the Conservative suggestions on the need for being very upfront about the costs of compliance. It can be approached in several ways. 
 The Government, rightly, have been bullied into accepting a regime of regulatory impact assessment; trying to assess, wherever possible, the cost of regulation. I am unsure what sort of regulatory impact assessment was carried out before the Bill was published, but it is surely right to assess costs imposed on companies being investigated or, more generally, the costs of compliance. That is consistent with the principle of transparency and keeping a check on regulation. I put my name to the starred amendment on this subject on those grounds. 
 The final amendment relates to parliamentary reporting. It would strengthen the legislation if the requirement to report to Parliament were beefed up and made much more explicit. The period of time appropriate for that has been debated. I would go further and prefer the Select Committee to have the power to call the Director General of the OFT and its members to quiz them on the annual report and the decisions that they have taken. It is for the Under-Secretary to face that issue, as she did membership approvals. Some explicit measures should be built into the Bill to give parliamentary reporting and debate a much clearer focus. I support the spirit of all three amendments.

Melanie Johnson: First, I agree with Opposition Members that the OFT's annual report should include information about its decisions and investigations. However, the level of specific detail proposed in amendment No. 3 is inappropriate for primary legislation. We intentionally included just the broad minimum criteria that the annual report must fulfil for a reason; to allow flexibility and ensure that the primary legislation stands the test of time. I do not disagree with many of the general remarks of Opposition Members.
 In reporting on developments in respect of matters relating to its functions, and on the extent to which it has met its objectives and priorities, the OFT will doubtless need and wish to include the sort of information specified by Opposition 
 Members. Indeed, the DGFT already includes such information in his current annual reports, and I fully expect the new OFT to continue to do so. As I have explained, it is unnecessary to spell it out in the Bill in such detail. 
 The hon. Member for Huntingdon mentioned this morning that the annual report presently covers the overall costs of OFT activities and, where possible, breaks them down into consumer enforcement, competition activities and so forth. He asked how much detail on expenditure could be expected.

Jonathan Djanogly: My point was rather more specific; that, particularly for larger investigations, there should be a breakdown by investigation.

Melanie Johnson: I was going to come on to that in a few minutes and shall do so after I have dealt with the amendments.
 Amendment No. 4 would add a further requirement to the OFT's annual report; that it include in its assessment, along the lines suggested by Opposition Members, the costs to business of its activities. While it is right that OFT considers the effects on business of its action, it is inappropriate and unnecessary to include the sort of assessment within its annual report. As several Opposition Members noted this morning and as was argued in the recent debate between the hon. Members for Huntingdon and for Southport, the act of the OFT collecting information required to make such an assessment might well prove an additional cost to business. I agree with the hon. Member for Southport that an element of opportunity cost is relevant; it is not simply a question of adding up the formal bills that are submitted, as the hon. Member for Huntingdon said.

Nigel Waterson: I am sorry to interrupt the Under-Secretary, but it might be even more difficult if I tried to intervene after she had moved on to another issue. Does a regulatory impact assessment of a Bill such as this take account of opportunity costs? If so, is a formula readily available?

Melanie Johnson: I am in danger of losing the thread of my argument, so hon. Members may not receive the answers that they require. I shall come back to regulatory impact assessments in a moment. Let me finish the point that I was making. The decision to investigate markets is taken on the basis of whether the OFT believes that there is a problem. As my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) remarked this morning, such costs are partly determined by the relevant businesses. It is their decision, not the OFT's, whether to employ expensive lawyers and consultants.

Mark Field: That simply does not face the reality of the position. If a business is going to be hit by an expensive and damaging OFT inquiry, it is perfectly understandable for it to employ the very best lawyers to ward off the potentially catastrophic results of a negative finding. Large companies have grave concerns regarding the broadest base of support. The Monopolies and Mergers Commission, for example–

Nigel Beard: Order. Will the hon. Gentleman curtail his intervention?

Mark Field: I am sorry, Mr. Beard. The Monopolies and Mergers Commission has had repeated investigations of particular sectors. What assurance can the Under-Secretary give that the same will not happen with the OFT?

Melanie Johnson: I do not accept the hon. Gentleman's intervention. Those who run both competition authorities–the OFT and the commission–say that legal resources are being deployed increasingly on the other side of investigations. It is a trend, but it is not under their control. It is not a fixed cost that can be quantified. Different elements will apply according to the particular investigation. The businesses will choose which lawyers and how many consultants will be employed. It is not the OFT's choice; that is my main point.
 The OFT is given powers for a purpose; to benefit consumers and other businesses where problems with the market are uncovered and remedies are made. As my hon. Friend the Member for Hemel Hempstead argued this morning, where the OFT uncovers a problem with a market and remedies that problem, the benefit goes to other businesses as well as consumers. It is well-nigh impossible to quantify such benefits. It is not simply a matter of sticking a figure into an annual report to provide such information. 
 As the hon. Member for Eastbourne acknowledged this morning, amendment No. 4 effectively would require the OFT to produce a regulatory impact assessment every year, covering the cost to business of its activities. The OFT will exercise only the powers granted by Parliament; it does not have powers to make regulations as such. As Opposition Members know, all legislation passed by this House is accompanied by a regulatory impact assessment. That is the appropriate time to consider the additional likely costs that new measures will impose. 
 This morning I was asked about guidance–

Jonathan Djanogly: Will the Minister give way?

Melanie Johnson: I am still trying to deal with issues raised this morning and I want to finish them. I was asked about the nature of regulatory impact assessments. Guidance has been produced by the Cabinet Office, in accordance with which all Government Departments work. It is regularly updated and specifically contains advice about how to produce RIAs. That guidance was used in the construction of assessments for this Bill.

Jonathan Djanogly: With respect, having heard the past few interventions, I feel that we are talking increasingly at cross-purposes. How can a regulatory impact assessment conducted at the start of a Bill's progress possibly consider the likely costs involved in what is a transactional-based series of costs? If we were in a recession and there happened to be three takeovers in a particular year, the costs may be very low. If we were in a boom and there were suddenly 20 takeovers, the costs would be massive. I do not see how the costs can be assessed today for what will happen in the future.

Melanie Johnson: The hon. Gentleman is making a point about the difficulty of varying costs from year to year.

Jonathan Djanogly: I am.

Melanie Johnson: Indeed, but stating the costs will not give any useful comparative data and, as I outlined, there are many reasons why it is difficult to bring those costs together. On the regulatory impact assessment, hon. Members asked whether we examined the opportunity costs. Yes, we do, as well as the one-off costs and recurring costs. However, we also assess the benefits to business, consumers and the economy as a whole. The figures have been produced on that basis in the regulatory impact assessments of the Bill.

Mark Field: It seems from the Under-Secretary's last comments that she is suggesting that where some individual businesses lose out as a result of an OFT
 inquiry, others gain. Are those costs being quantified and is she suggesting that gaining companies should look to compensate those who lose out because of a draconian OFT inquiry?

Melanie Johnson: The hon. Gentleman is missing my point, which is that it is impossible to quantify. We make our best efforts at quantifying the costs and benefits in such situations, but it is well nigh impossible to come up with formulae. In my experience, benefits are more difficult to quantify than costs, which is true in most regulatory impact assessments. I agree with the comments of my hon. Friend the Member for Hemel Hempstead, who said this morning that many other businesses benefit. An economist would have to spend a lot of time quantifying the benefits of specific OFT inquiries or investigations to other businesses that, from a better operation of competition in the market, may gain substantially.

Jonathan Djanogly: We are talking not about assessing benefits, but about an amendment that concerns assessing costs. I sympathise with the Under-Secretary's comments, but they do not relate to the proposal. Another point is that we are debating an annual report, so the issue will have to be reassessed annually. She seems to be talking about the position today, but this will recur.

Melanie Johnson: Regulatory impact assessments are conducted when Bills are produced. The hon. Gentleman is not arguing for other regulatory impact assessments of the Bill at intervals. As I understand it, he is arguing for the costs to business to be quantified and specifically laid out, and I have given several reasons why I believe it is impossible to quantify the costs to business. The point about benefits is that they must also be taken off the bottom line to work out the net costs. Some benefits are to businesses themselves, and if we were to accept a cost assessment–which I would not–we would need to assess the benefits in some cases. They are benefits not only to others, but to business.

David Borrow: Does the Under-Secretary share my concern that many of the comments made by Opposition Members seem to imply that the information in an annual report about the costs to business of the investigations will be used to discourage the OFT from conducting thorough investigations and that should expensive investigations not produce results, those costs will be used to berate the OFT for undergoing the investigation in the first place? The basis of any effective regulation system is to be prepared for thorough investigations while recognising that some will find nothing wrong.

Melanie Johnson: Indeed. There is a danger that the costs, rather than the operation of the competition authorities, become the direct issue in all cases. Obviously, the authorities will have to maintain their credibility, including producing outcomes that one would expect from worthily undertaken investigations. None the less, there will be occasions when the points made by my hon. Friend the Member for South Ribble (Mr. Borrow) will come into play and the costs could act as a disincentive.
 As I said, the Bill has been the subject of a comprehensive and considered regulatory impact assessment. It took into account the responses to the White Paper consultations and concluded that no significant costs will be directly imposed on business from the consumer and competition measures in the Bill. Of course, there will be some additional costs but, as the assessment noted, there will also be benefits for business. That overall picture is the accurate one. 
 Amendment No. 2 would require a debate in each House of Parliament each year on the OFT's annual report. Again, I agree with Opposition Members that the OFT should be fully accountable, but I am not convinced that the amendment is necessary to achieve that. At present, the Director General of Fair Trading publishes an annual report, which is laid before Parliament. The Bill will strengthen that by requiring the new OFT to publish and lay before Parliament an annual plan as well. As with the current DGFT, the chairman of the board will be the accounting officer and, therefore, accountable to Parliament for how the OFT's resources are used. He may be summoned by parliamentary Committees, and the OFT will have to agree a service delivery agreement with the Treasury for it to obtain resources in the first place. That SDA is also a public document. 
 All that means that both Parliament and the wider public will be able to hold the OFT to account, and if at any point in the future hon. Members decide that they wish to hold a debate on the OFT's annual report, that can be considered in the normal way at that time. It is unnecessary to decide that now and commit parliamentary time for every future year. Furthermore, there are processes by which Select Committee investigations form the subject of debate, so issues can be brought up in that way. 
 The amendments are unnecessary, and I trust that having heard my arguments, Opposition Members will feel able to withdraw them. If not, I regret that I shall ask the Committee to oppose them.

Nigel Waterson: I confidently predicted to someone recently that I thought that there would be few, if any, votes in this Committee, but I might be proved wrong. The Under-Secretary is being wholly intransigent.
 Let us first consider amendments Nos. 2 and 3, which from any view are less controversial. Amendment No. 3 calls for a summary of OFT decisions, which would help people to see a pattern emerging on how it approaches matters, and amendment No. 2 would require a debate on what the OFT has been up to. I find it inexplicable that the Government would not want to see both those things happen to help their purported agenda for transparency. 
 The meat of this particular sandwich comes in amendment No. 4.

Melanie Johnson: Before the hon. Gentleman moves away from amendment No. 3, does he accept that I agree entirely with the thinking behind it but do not think that it is appropriate to put the measure into the primary legislation? That is the only difference between us.

Nigel Waterson: I am grateful for that point, but the difference is crucial. The OFT could conceivably take a different view and consider that the details of its investigations should not be reported, in which case the body of precedent would not be available to the outside world, which would be an enormous shame.
 Moving on briefly, and finally, to the more controversial amendment, amendment No. 4, I was interested to see that in a group of only two Liberal Democrats, we seem to have two different views. There is a split, as it were, but Liberal Democrats are not unknown for working both sides of the street on any number of issues. 
 Our debate on the regulatory impact assessment seems to have got rather fraught. As I have said more than once, I do not understand how the Bill can fail to have a significant impact on business. Even if I am wrong about that, it must surely be easier for the OFT in effect to produce its own annual regulatory impact assessment based on real facts rather than on what might happen when the Bill becomes law. The assessment will be based on real investigations, costs and companies. 
 It is all very well for the Under-Secretary to go on about the slightly airy-fairy notion of there being benefits to ''business'', or the gaffers, as the hon. Member for North-East Derbyshire (Mr. Barnes) might put it. However, if she is making the point that some businesses might benefit from a specific investigation, it is equally unarguable that the business investigated successfully–and even more so in the case of the business investigated to no purpose–will have costs to bear. The hon. Member for South Ribble made an interesting intervention. We seek simply to put information in the public domain. It is entirely neutral of itself what use is made of it. It is not some Tory plot to batter the OFT into not doing any investigations. It is information that should be available and people can make of it what they will.

Tony McWalter: I wish to take issue with the hon. Gentleman's definition of the benefits here as ''airy-fairy''. For example, it would be enormously beneficial to the person who produces genuine organic milk organically to have the person who produces milk that he calls organic that is not produced organically taken to task. It cannot be an airy-fairy benefit, but a real benefit, that proper businesses competing fairly are retained and those that are not competing fairly and are using all sorts of duplicitous means to undermine others are brought to book.

Nigel Waterson: I thought that the hon. Gentleman was about to say that it should be put out of business rather than brought to book.

Tony McWalter: Yes.

Nigel Waterson: Ah well, if necessary. I do not think that the OFT regards one of its powers as putting people out of business. As my hon. Friends the Members for Huntingdon and for Cities of London and Westminster (Mr. Field) have both graphically explained, that can be the effect of an investigation, or of repeated investigations. The records industry is a good example of an industry that has been subject to a
 series of investigations over a number of years at enormous expense. We might have some data on that for a debate later in our proceedings.
 One must look at the worst case, which is a company or a sector that is subject to an OFT investigations at vast expense with nothing at the end of it. Merely being given a clean bill of health may not be enough. It may be enough to sound the death knell of the company or companies and it is impossible for hon. Members on either side to argue convincingly that this information should not be available. It has emerged that we now have this wonderful document that sets it all out. Some boffins in the Cabinet Office have produced a set of rules. Those rules have been applied to the Bill, albeit with a slightly incredible result, but it should be a great deal easier to produce an assessment of the impact of investigations by an actual OFT, rather than the more nebulous investigation of the potential effect of a Bill.

Andy Burnham: Rather than compelling companies to disclose information, should it not be a matter of individual choice for the directors of each company concerned whether to make public the costs that it has incurred as part of an OFT investigation?

Nigel Waterson: The hon. Gentleman has a firm grip of the wrong end of the stick. We are talking only about what the OFT must disclose. It is a matter for the OFT and we are not going to micro-manage it to that extent. However, I would have thought that the OFT would produce a figure rather than specific details about individual companies. We will come on to that; it is a good point that should perhaps be made later. There is some discussion to be had about the disclosure of information and the safeguards, which we believe are inadequate.

Melanie Johnson: Does not the hon. Gentleman accept that the OFT has no information about the costs to individual businesses of being involved in investigations or cases with which the OFT is dealing?

Nigel Waterson: I presume that whoever produced the assessment for the Bill had no idea of specific costs, so how on earth did they arrive at it? Perhaps we can chat about it later over a drink as it is fascinating in an anorak sort of way. By any account, the impact assessment has been prepared in a total vacuum. No one is complaining, except about the result, which seems a little weird. The Under-Secretary was brandishing a nice, thick document that sets out how to approach it. I presume that a slimmer document could be prepared for, and by, the OFT.

Melanie Johnson: I briefly remind the hon. Gentleman of two points that I made. I ask him to take them into consideration in his remarks, as he does not seem to be doing so. Of course, the existing regime has costs for business. My first point was about additional extra costs. The second is that the OFT does not make regulations. The regulatory impact assessment is for authorities, which make regulations and are therefore in control of the degree of regulation and the costs of the regulatory process, to consider the costs and the benefits. The OFT does not make those regulations.

Nigel Waterson: I take the Under-Secretary's point. I do not suggest that the OFT makes the regulations. However, the amendment could not be clearer: it is
''an assessment of the additional cost to business of the exercise of its functions.''
 There is a cost to be assessed if the OFT decides to exercise its function by having yet another investigation into, say, the record industry, and has a result or no result–end of story. This is not rocket science–I did not think that it was when I tabled the amendment–but information that should legitimately be in the public domain. The CBI is concerned about that. It is not something that I dreamed up on the beach in Eastbourne; it is a concern of business people. I am amazed that the Government are not prepared to accept the amendment, let alone the two less controversial amendments. I urge hon. Members to support the amendments. 
 Question put, That the amendment be made:–
The Committee divided: Ayes 5, Noes 11.

Question accordingly negatived.

Nigel Waterson: I beg to move amendment No. 5, in page 2, line 31, leave out
'shall have regard to the need for excluding'
 and insert 'shall exclude'.

Nigel Beard: With this we may discuss the following amendments: No. 6, in page 2, line 32, leave out
'so far as is practicable'.
 No. 7, in page 2, line 34, leave out 'in its opinion'. 
 No. 8, in page 2, line 34, leave out 
'seriously and prejudicially affect the'
 and insert 
'significantly harm the legitimate business'.
 No. 9, in clause 6, page 3, line 17, leave out 
'shall have regard to the need for excluding'
 and insert 'shall exclude'. 
 No. 10, in clause 6, page 3, line 18, leave out 
'so far as is practicable'.
 No. 11, in clause 6, page 3, line 20, leave out 'in its opinion'. 
 No. 12, in clause 6, page 3, line 20, leave out 
'seriously and prejudicially affect the'
 and insert 
'significantly harm the legitimate business'.

Nigel Waterson: I hope that we are moving on to less controversial territory, but let us see. This series of amendments is designed to tighten up the provisions of clause 4. They are all supported and sponsored by the Confederation of British Industry, which is again expressing through us its legitimate concerns about the clause.
 Amendment No. 5 would remove from subsection (5) the rather woolly phrase 
''shall have regard to the need for excluding'',
 because that places too subjective a discretion in the hands of the OFT when it comes to disclosing sensitive information. We agree with the CBI that there should instead be a clear requirement, hence our wish to insert the words ''shall exclude''. 
 The disclosure of sensitive information arises at several points in the Bill. Indeed, the hon. Member for Leigh (Andy Burnham) touched on that issue in an intervention a moment ago. It is desperately important to business that sensitive information that could make or break a commercial organisation is not spread around as my hon. Friend the Member for Huntingdon described, but is kept confidential as far as is necessary or possible. 
 Amendment No. 6 would remove the words 
''so far as is practicable''.
 Again, we are trying to tighten the obligation on the OFT in respect of how it treats sensitive business information. 
 Clause 4(5)(b) allows the OFT to exclude information from its annual report if, in its opinion, publishing that information might seriously and prejudicially affect the interests of a particular person. That is welcome, as the CBI agrees, but again the discretion on the part of the OFT is too subjective. Amendment No. 7 would remove the words ''in its opinion''. 
 Under amendments Nos. 8 and 12, the words 
''seriously and prejudicially affect the'',
 which are also in clause 4(5)(b) and clause 6(3)(b), would be removed and replaced with 
''significantly harm the legitimate business''.
 The reason for the change is that that phrase is in clause 235 and it makes enormous sense for the same wording to be replicated here. That would provide clarity and consistency. Frankly, it seems odd to use two different standards for disclosure in the same Bill. In other words, parts 1 and 9 should be harmonised. That makes excellent sense. 
 The OFT has a function to make the public aware of the ways in which competition may benefit consumers and the United Kingdom economy. Again, we propose a series of amendments that would tighten the obligation on the OFT. These constitute sensible precautions. In today's debates, we have touched on the harm that can be done to companies if information is spread around where it should not be. I am sure that that will not happen, but one must consider all possibilities. One would not want a newly reconstituted OFT, flush with its new powers and functions, to impress the legislators and 
 public at large with its effectiveness and usefulness by conducting dawn raids with massive publicity and tipping off chosen journalists, resulting in large spreads in the media about a particular investigation. I referred a few days ago to dawn raids on pharmaceutical companies. Clearly, some of the media were briefed.

Melanie Johnson: I trust that the hon. Gentleman will make it clear that the Serious Fraud Office, not the OFT, was involved in those raids.

Nigel Waterson: It was certainly not the OFT. When I mentioned the case earlier, I referred to the Serious Fraud Office. I am simply reflecting that one public body might behave like another in the same circumstances. An investigative body with wide powers and a large budget and staff might be tempted to behave in that fashion. I concede that I was talking about a different body–we have not even set up the OFT yet–but in the case to which I referred a great deal of information seemed to be in the public domain early on without any criminal charges being levelled. I hope that the Under-Secretary and other members of the Committee agree that that was an unhelpful way to proceed. In any event, we are adamant in pressing for tight restrictions on disclosure of information to people who have no business receiving it.

Jonathan Djanogly: Clearly, the fact that the Serious Fraud Office was involved is relevant because it is highly likely that it will be used again in future when an OFT investigation is under way. It would not be the first time that an investigation had been botched. The arrest of the Maxwells springs to mind–an appalling release leaked to the press prejudiced the trial in that case.

Nigel Waterson: My hon. Friend provides a good example from the recent past. I have no doubt that the Serious Fraud Office will become involved in some of the same matters as the OFT. If the Under-Secretary believes that I am wrong, she will no doubt intervene to say so. The concern is legitimate: it is not just ours, but that of the CBI and other business organisations that appreciate the need not only for annual reports, but for making information about the OFT available in the public domain. I shall not labour the point, but as I explained earlier, that would be helpful. We need to see what pattern emerges as the OFT discharges its functions. No one disagrees about that, but we must ensure that sensitive information does not leak out and unfairly cause commercial harm to any of the bodies or companies involved. That is the rationale behind the amendments. I hope that they will fare better than the last group.

Vincent Cable: I want to ask some questions–not loaded questions–because I do not entirely understand the purpose of the amendment or, indeed, the clause that precipitated it. The hon. Member for Eastbourne made sensible remarks about the disclosure of confidential information, but the part of the Bill to which he and the CBI have taken exception does not relate to confidential information. It refers us to subsequent clauses and the exclusion of
''the affairs of the particular person''.
 It then goes on to talk of disclosure of information affecting 
''the interests of that person''.
 Why is it a problem to relate to particular individuals in this context? Let me take one or two provocative examples. Let us imagine hypothetically that Mr. Berlusconi decided to diversify out of Italy–he is doing so in any case–and bought into British commercial radio or local newspapers. A competition reference would, as I understand it, have to take place in terms of the companies that are vehicles for him as an individual. Why would there be a problem about talking about that individual? He is the issue. 
 Let me take another case. Enron has effectively departed this world, but if it were still a going concern and making bids for British energy companies, why would there be a problem in the OFT publicly discussing the behaviour of Mr. Skilling? He was not the owner but the chief executive, with many interests and options; it was his operations in the company that presented the problem. Why should reference to a particular individual be highly sensitive? I do not understand.

Melanie Johnson: Perhaps I may help the hon. Gentleman and save him from listing many examples. Under the Interpretation Act 1978, ''a person'' includes companies, so the word ''person'' does not relate only to individuals.

Vincent Cable: I thank the Under-Secretary.

Ken Purchase: May I make a general point? There is a case for saying that newspapers should not publish the name of anyone who has been charged or is on trial until they have been proved guilty. It is not a strong case and would be part of a slippery slope towards the public never knowing the details. In cases in which there is a general rule of non-disclosure to the press, public or any written report, we may find that the nature of the offence being investigated and the previous record of the person involved are both so serious that a disclosure should be made in the public interest. I will not quote particular cases, but the world of business has not been without rogues and confidence tricksters operating and proving a considerable danger to the general public.

Nigel Waterson: I am listening intently to the hon. Gentleman's thoughtful contribution. There are two arguments. First, it may be right to prevent the disclosure of people's names when there has been no charge, let alone a conviction. Secondly, as my hon. Friend the Member for Huntingdon mentioned, it may be sensible to prevent such disclosure because the publicity may prejudice an investigation or, more seriously, a subsequent prosecution.

Ken Purchase: That is absolutely correct, but the Bill includes a discretion, which the hon. Gentleman argued against. I am arguing in favour of the discretion because it is important for a judgment to be used at the time on whether to publish. We must look for responsible decision making on that, but on
 the point of principle, to close off any possibility of protecting the public by disclosure would be wrong and would weaken the purpose of the Bill, which is essentially about consumer protection. In debating the first measure this morning, the hon. Gentleman referred to the importance that his party placed on consumer protection and so I assume that we are as one on this matter.

Nigel Waterson: The clause deals with the annual report of the OFT, so it does not touch on the outcome of any individual case or investigation. If a major investigation concluded that there had been breaches, I assume that there would be any amount of reference to the facts of the case and the people involved. We are debating merely what should be contained in the annual report, which by definition is produced at a fixed point each year, and not at the end of an investigation into one particular company.

Jonathan Djanogly: Of course, the vast majority of cases will be civil, not criminal. A civil penalty may be involved where a company, or part of its business, has been deemed on balance to be anti-competitive. In such a case, the company will have good reason to want to protect the rest of its business.

Ken Purchase: I agree. My experience of long-term ownership of businesses is that, by and large, people are honest and try to conduct their business according to the rules of the game. However, we are talking about the discretion or the right for a business to be named if the need arises. That discretion will be exercised properly and it need not hold any horrors for us at this stage. I urge the Under-Secretary to reject the amendments.

Jonathan Djanogly: I want to deal with a particular point before I go on to other issues. Amendments Nos. 11 and 7 relate to the key issue of the word ''opinion''. The test should be as objective as possible, rather than subjective. There are many ways of looking at that. It seems to be assumed that the OFT will know everything about a company while it conducts its investigation. However, in the vast majority of cases it will not. The OFT will find out about only a small part of the company–a product that it is selling, for example–which it is investigating. The OFT may not know that by releasing certain information, it will damage another part of that company's business. The release of a particular piece of information may have a negative impact on a different product that the company is preparing.

Ken Purchase: We all agree that a disclosure is a serious matter. Does not the hon. Gentleman accept that in the event of a disclosure, extensive inquiries would have been made and the company or individual consulted beforehand about the need to publicise their name? We should give credit to those who conduct the investigation.

Jonathan Djanogly: The hon. Gentleman makes a good point that I was about to deal with. That is what should happen, but the legislation does not provide for that. The opinion of the OFT may become irrelevant to the damaging effect of the release of the information. As the hon. Gentleman mentioned, there should be a mechanism whereby the proposed
 release of the information to the public is notified to the company in advance, so that it has the opportunity to appeal. There may be circumstances in which a decision against the commercial interests of the company and the public must be debated, and there should be a forum to do that.
 The wider issues also relate to the release of information.

Tony McWalter: Before the hon. Gentleman leaves that point, does he not agree that it is most unlikely that that sort of information would be released where a company co-operated fully with an OFT investigation? It should be necessary to protect consumers and other businesses from a company's actions only where it is clearly obstructing the investigation or being unco-operative.

Jonathan Djanogly: I should like to think that the hon. Gentleman is right, but we have to consider where trials by media often emanate from, for instance. Leaks happen and companies are right to be concerned about their possible implications. It would be helpful if the Under-Secretary could clarify what rights other people or other companies have to request company information held by the OFT in either published or unpublished form. I appreciate that several other pieces of legislation are probably involved, but I should be grateful if she could help me on that issue.
 Clause 7 provides for the release of information to Ministers. Once the information has crossed over from the OFT to the relevant Minister, does the status of the information change so that people have a different right of access to it? One concern is whether the Human Rights Act 1998 could be used to obtain information. 
 We are talking mainly about companies being regulated and breaking the law, but it is also important to talk about protecting companies, because in modern life, access to information is vital. It must be appreciated that, in other jurisdictions, particularly ones with more liberal access-to-information laws, the law is increasingly being used as a sword as much as a shield. In other words, companies are getting confidential information–

Nigel Beard: Order. I remind the hon. Gentleman that the clause is specifically about publication of the annual report, not a general release of information.

Jonathan Djanogly: Thank you, Mr. Beard.

Melanie Johnson: I seek clarification, Mr. Beard. Should I respond to amendments Nos. 5 to 12? I understand that we have been debating all of them.

Nigel Beard: That is correct.

Melanie Johnson: Thank you. We agree on the importance of ensuring adequate protection of individual and business interests. However, there is a need to strike a balance between excluding information that seriously prejudices the interests of individuals and businesses and enabling the OFT to carry out its functions, such as explaining a decision fully and in context in the annual report. Clauses 4(5)(b) and 6(3)(b) in particular have been drawn to our attention. Those clauses achieve a balance,
 providing adequate protection of individual and business interests without unduly impeding the OFT's provision of information and advice to the public, or its publication of reports.
 On amendments Nos. 7 and 11, and the words ''in its opinion'', I may have to seek your advice about voting, Mr. Beard, because those are part of one group. The OFT is in any case bound by a duty to act reasonably. The amendment would make no difference to that duty, so I would be happy to accept amendments Nos. 7 and 11. I shall deal separately with amendments Nos. 8 and 12, which are different. For the reasons that I have given, amendments Nos. 5, 6, 9 and 10 do not add anything and I ask the Committee to oppose them. 
 I will try to be as helpful as I can on amendments Nos. 8 and 12. We agree that the legitimate business interests should be protected. The current provisions achieve that in many ways. They are in line with clause 235(3) and (4) although the wording and context differ slightly. We agree, however, that there may be some benefit in consistency across the clauses if the amendments are accepted. 
 As we said this morning, we should be constructive and aim to work together to make this a better Bill. Achieving consistency across the clauses would indeed make it better. Amendments Nos. 8 and 12 would restrict the provision only to business interests. To align the provisions fully we would want protection for non-business interests too and therefore I would be happy to consider amendments Nos. 8 and 12 further and to come back on Report with something that takes on board both the points that Opposition Members made and our need to ensure that consistency works across both business and non-business interests.

Nigel Waterson: I am delighted that we are making progress on this. Of course, it would be churlish not to withdraw the amendment. I look forward to seeing the improvements that the Minister and her officials make to amendments Nos. 8 and 12. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Amendment made: No. 7, in page 2, line 34, leave out 'in its opinion'.–[Mr. Waterson.] 
 Clause 4, as amended, ordered to stand part of the Bill. 
 Clause 5 ordered to stand part of the Bill.

Clause 6 - Provision of information etc. to the public

Amendment made: No. 11, in page 3, line 20, leave out 'in its opinion'.–[Mr. Waterson.] 
 Question proposed, That the clause, as amended, stand part of the Bill.

Melanie Johnson: I am happy to say what I can on the clause. We have covered much of the ground already. Clause 6 will give the OFT the function of promoting to the public the benefits that competition has for
 consumers and the economy and providing the public with information or advice on matters relating to its functions. It enables the OFT to publish educational literature or take part in educational activities and to provide support to others producing such literature or carrying out such activities. It enables the OFT to continue to provide a wide range of information and advice helpful to consumers and business. In publishing any literature, the OFT is obliged to have regard to the need to exclude information that is seriously prejudicial to a person or business.

Nigel Waterson: I have only a fairly narrow point to make on the clause. I want to elicit information from the Under-Secretary. The matter also relates to clause 5, but it seemed inappropriate to make the same point twice. It is raised in a briefing from the National Association of Citizens Advice Bureaux, which says:
''we are disappointed by the absence of any duties prescribed to the OFT. Duties are so often the guiding lights for regulatory bodies.''
 It also points out that there should be a general duty to protect consumers, a duty to educate consumers and a specific duty to investigate complaints made. I am not wholly clear what the difference is between a function and a duty. If the Under-Secretary wants to intervene now she may be able to put me out of my misery. 
 I can see the difference between a power and a duty: a duty presumably means that one is under an obligation to exercise a power, but I am not sure how a function differs. It may be a distinction without a difference, but it seems to exercise NACAB and if it is good enough for that organisation, it is certainly good enough for me. NACAB makes a related point, which I throw in now for what it is worth, when it says: 
''We would also urge the Government to ensure that the new powers for the OFT are accompanied by sufficient resources to enable the new OFT to fulfil all of its functions satisfactorily.''
 We will deal with that issue in more detail later. Could the Under-Secretary help me on functions?

Melanie Johnson: I am advised that function covers both powers and duty. I hope that that helps the hon. Gentleman and NACAB.

Jonathan Djanogly: Clearly, the mirroring of the amendments in the different clauses with different implications has caused some confusion. We are talking about the provision of information to the public. Clause 6(1)(b) refers to
''giving information or advice in respect of matters relating to any of its functions to the public.''
 Companies could try to use such provisions for fishing expeditions on their competitors. I should be grateful if the Minister could clarify to what extent the Bill, in conjunction with other relevant pieces of legislation could be used by competitor companies. We are dealing with competition and aiding consumers and it would be unfortunate if the legislation could be used to gain an unfair advantage over a competitor. That is of great concern and is relevant in countries such as the United States that have greater freedom of information than we do. The clauses talk about publishing information. What about unpublished information? How long would the OFT keep the information after the investigation cleared the 
 company concerned, and when would it have to disclose it to the public? Would the OFT have to destroy the information that it holds at some point?

Melanie Johnson: I hope that I can help the hon. Gentleman. Specific merger market information and consumer investigations are restricted under part 9. The main function of the clause is the provision of information to the public, as it says. That is unlikely to give rise to the hon. Gentleman's anxieties. The OFT would not publish anything confidential to a company without first consulting it. As we discussed, clause 6(3) aims to give companies the protection that they need and Opposition Members share that aim.
 Question put and agreed to. 
 Clause 6, as amended, ordered to stand part of the Bill.

Clause 7 - Provision of information and

Nigel Waterson: I beg to move amendment No. 13, in page 3, line 23, after '(1)', insert:
'Subject to the overriding requirement to keep sensitive business information confidential,'.
 We move to another clause, but at least some of the arguments are the same. I will therefore keep my comments brief. The point cannot be repeated too often in the relevant parts of the legislation and the arguments have been revisited many times. The CBI speaks for business when it supports the amendment. We hope that it may find favour with the Under-Secretary.

Melanie Johnson: The amendment would make the OFT's provision of information and advice to Ministers or public authorities subject to an overriding requirement to keep sensitive business information confidential. It may hinder the OFT's capacity to advise Government and public authorities and it is also unnecessary. I reassure the hon. Gentleman that the clause is aimed at the OFT commenting on general trends and specific legislation, not at specific companies. As I mentioned in my remarks to his hon. Friend the Member for Huntingdon, specific protection is offered for consumer and competition information as defined under part 9. I therefore regret that although the hon. Gentleman suggested that the amendment was parallel to the others, it is not in the same category. I hope that he will withdraw it in the light of my remarks. If not, I will oppose it.

Nigel Waterson: I am happy to accept the Under-Secretary's explanation. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Nigel Waterson: I beg to move amendment No. 14, in page 3, line 32, at end insert:
'(3) It shall also be a function of the OFT to issue guidance to trading standards departments about the use of their powers to obtain Stop Now orders and to ensure that such powers are used consistently.'
 Despite our puzzlement about the meaning of the word ''function'', we were still keen to impose another 
 function on the OFT, and that is it. That is a serious, practical point. One benefit of super complaints–we are not dealing with them now–is that they should prevent different levels of interest in pursuing an abuse being expressed in different parts of the country. The matter can then be dealt with globally as a global concern, if that is not too simplistic a view of the meaning and import. 
 Some 200 trading standards departments around the country have varying amounts of resources to devote to particular abuses. They have different priorities, which is, in a sense, right. Later in the Bill we will hear the views–about resources and other matters–of the Trading Standards Institute and the Local Government Association, among others. Some attempt has been made to ring-fence some resources for trading standards departments. According to my information, it has not been particularly successful. Resources always have a tendency to be siphoned away into other local government activities even though, with the best will in the world, they are destined for trading standards in other departments. On any view, therefore, we have a big problem of inconsistency between different trading standards departments in different local councils throughout the country. 
 The OFT should have some overview of how stop now orders are carried out in practice. I do not want to oversell the amendment, but the OFT should have some say in bringing consistency of policy. We shall debate stop now orders in more detail shortly, but it would be worrying for business if some trading standards departments went off like a rocket and handed out stop now orders like bus tickets while others hardly issued them at all. Bringing some consistency is therefore a sensible extra function to heap on the OFT and we hope that it will find favour with the Government.

Melanie Johnson: I support the intention behind the amendment–to improve the consistency of approach in the use of stop now orders. The amendment is designed, as the hon. Gentleman explained, to achieve two objectives. The first is to give the OFT a duty to issue guidance, but it is unnecessary because it already has a duty to issue guidance on stop now orders under the Stop Now Orders Regulations 2001–I appreciate that they are not before us today–and under clause 220, which places it under a duty to issue guidance on the corresponding provisions in part 8. The OFT issued interim draft guidance on stop now orders last year and, after extensive consultation, the final version was published last week. Copies have been made available to members of the Committee.
 Secondly, the amendment is designed to place a duty on the OFT to ensure that stop now orders are used consistently. We want enforcers to use the powers in the regulations and part 8 of the Bill consistently. The OFT guidance has the aim of promoting consistency and, to prevent duplicate proceedings, it can direct that enforcers other than community enforcers may not take a case to court if another enforcer is already doing so. 
 The OFT does not, however, have a general power to direct the activities of trading standards departments, which are, as the hon. Gentleman would accept, obviously part of local authorities. We do not believe it appropriate for the OFT to have such a power in that regard. We expect the OFT to do all it can to support and encourage the consistent use of these powers, but it is not right to place it under a duty to ensure that. For the reasons I explained, it does not have the power to do so. 
 I hope that the hon. Gentleman will accept that we support his intention and that much of what he wants the amendment to achieve will be achieved by the Bill and existing regulations. I am hoping to persuade him to withdraw the amendment. If not, I encourage the Committee to oppose it.

Nigel Waterson: I am grateful for the Under-Secretary's explanation. I am delighted to hear that the Government have broadly the same intention, so I accept that a formal amendment is unnecessary. We have now received the stop now orders guidance, which helpfully came out on the day of Second Reading. We are continuing to get our heads round it, but it seems likely that the OFT will pursue some attempts to achieve consistency, whether by holding seminars, issuing press releases or generally keeping in touch with trading standards departments or the Trading Standards Institute, which would also have a role.
 I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Nigel Waterson: I beg to move amendment No. 15, in page 3, line 32, at end insert–
'(3) Any such proposals, information and/or advice made or given to a Minister of the Crown or other public authority shall be published.'.

Nigel Beard: With this it will be convenient to consider amendment No. 16, in page 3, line 32, at end insert–
'(4) A Minister of the Crown who receives any such proposals or advice shall deliver (and publish) a reasoned response to such proposals or advice within 6 weeks of receipt thereof.'.

Nigel Waterson: These amendments have a little more meat to them. Clause 7 contains important provisions that empower the OFT to make proposals and give information or advice to Ministers of the Crown or other public authorities. It is difficult to argue against there being a formal interface between the OFT and other bodies. We have heard already about its potential relationship with the Serious Fraud Office, but I hope that there will be slightly less colourful relationships. In the interests of transparency, about which the Under-Secretary has spoken several times, we believed that there should be an attempt to make the process as open as possible, which is why any such advice or information should be published. The hon. Lady may say that there are subjects that are too confidential to be published, in which case I would be more than happy to withdraw the amendment if the Government come back with a more suitable one of their own.
 Furthermore, it seemed to us that a Minister who receives a proposal or some advice from the OFT should be obliged to respond within a reasonable amount of time. We would not want a one-way street in which, after careful consideration that is possibly based on a lengthy and extensive investigation, the OFT could come out with proposals or advice that were simply filed away and not pursued. It is important that, as far as possible, such matters are in the public domain and amendment No. 16 would ensure that a response was made to such advice or proposals within six weeks. 
 I am not dogmatic about the time period. It may seem a short time in some reaches of the civil service and we could make it longer, or perhaps shorter. However, a requirement on the Minister to produce a reasoned response is important, and although it may not be clear from the amendments, it is implicit that any such response to a proposal, advice or information should also be published. I imagine that such proposals, advice or information would be few and far between, but for that reason, they would probably be important to matters of more general significance to the OFT in the carrying out of its various functions. 
 On that basis, I commend both amendments to the Committee. They are eminently practical, but I will be happy if the Under-Secretary can improve on them in the way that I have suggested.

Melanie Johnson: The amendments would ensure that all the proposals, information and/or advice to Ministers from the OFT are published and that any Minister of the Crown who receives proposals or advice from the OFT should deliver and publish a reasoned response within, as the hon. Gentleman said, six weeks of receipt. I fear that I am not on the same wavelength as the hon. Gentleman on this, because publication of such material would not always be appropriate and, in fact, could harm individual and business interests in some circumstances. It would also not always be appropriate or necessary for the Government to publish a response to each piece of advice or proposal from the OFT. Our intention is that the OFT should advise where laws and regulations create barriers to entry to markets and competition, or channel markets in a particular direction, thereby holding back innovation and progress.
 The Government have made a commitment in the competition White Paper to publish a response within 90 days of receiving a report. However, the amendment goes beyond that. It is inflexible and unnecessary; it might harm individual and business interests if we were committed to such wholesale publication. I therefore urge the hon. Gentleman to withdraw the amendment.

Nigel Waterson: I am sorry that the amendments have not found more favour with the Minister. However, we have bigger fish to fry, so I am happy to beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 7 ordered to stand part of the Bill.

Clause 8 - Promoting good consumer practice

Question proposed, That the clause stand part of the Bill.

Melanie Johnson: The clause sets out the OFT's function to encourage and approve codes of practice produced by a variety of bodies. It sets out the OFT's powers to implement the new codes of practice regime to make it easier for consumers to identify reliable traders, give formal approval to good business-to-consumer codes and encourage such codes. The OFT will be able to oversee the operation of approved codes, withdraw approval from codes that are not operating satisfactorily, and signify approval of codes in any manner that it sees fit, including the creation of a logo and authorisation of sponsors and their members to use it. That will help consumers to recognise approved codes.
 It is intended that adherence to a code of practice should ensure good practice by business when dealing with consumers. Only codes that regulate the conduct of members will be approved. For example, a code may contain a redress mechanism or a complaints procedure. A code might also include sector-specific criteria. The OFT will be able to encourage the making and use of such codes of practice that it considers will safeguard and promote the interests of consumers. 
 The clause clarifies the OFT's powers. It was uncertain whether such powers existed under the Fair Trading Act 1973, which is to be repealed by schedule 26, because that legislation was stated in very general terms. The new regime attempts to build on it and will benefit consumers and business alike. It will make it easier for consumers to find reliable businesses. Good codes of practice are sometimes more effective at solving consumers' problems than recourse to law. Businesses will gain a marketing advantage from OFT approval. It will also help good businesses to distinguish themselves from rogues. 
 Self-regulation can be a viable alternative to statutory regulation. It is sometimes better for protecting consumers, as legislation can be inflexible and difficult to change. Codes, however, can be changed quickly in response to new unfair business practices that are detrimental to consumers. Regulation can impose unnecessary bureaucracy and additional costs upon business, with the knock-on effect for consumers of increased prices. 
 With an effective marketing campaign on the value of codes, we believe that businesses in most sectors will want to sign up to approved codes, or to set up codes where they do not exist. We want to enable the widest possible range of businesses to join, including small local firms. The provision will, therefore, allow a range of organisations to be code sponsors, such as local authorities, chambers of commerce, registered charities and the promoters or landlords of shopping centres. Businesses will not have to belong to a trade association to gain the right to use a logo. That will make it easier for small businesses to find a suitable point of entry. 
 It is time for a new, effective codes of practice 
 regime that benefits both consumers and business. I therefore commend the clause to the Committee.

Nigel Waterson: I do not want to detain the Committee for long because we think that the clause is a thoroughly good idea–that is why we have not tabled any amendments to it. The Minister referred to the Fair Trading Act 1973. She slightly understated its relevance because in that provision the director general had a general duty to encourage the preparation and dissemination of codes of practice.
 I often think that one can go through an entire Committee stage with no one referring to the explanatory notes to a Bill. That must be frustrating for the officials who prepare them, so I thought that I ought to make at least one foray into them. The notes make the point that the existing power, function or duty–or whatever it might have been in 1973–supported the development of codes by 42 trade associations in 24 sectors. 
 As the Minister said–it bears repetition–codes are attractive to the good companies and businesses who want to do only the best for and by their consumers. The motive is to help consumers identify reliable suppliers. Indeed, the booklet ''Empowering Consumers in the Enterprise Economy'' published in January, states: 
''codes are more flexible than regulation, as they can be changed more quickly in response to the development of new business practices.''
 The Minister makes the same point. This is a good illustration of how a simple provision will probably have a more practical effect for the average consumer than any panoply of powers and duties that may be imposed under the Bill . It will have a limited cost to business, and the good businesses will sign up in any event. Indeed, some are already signed up; it has already made a difference. 
 Unsurprisingly, codes are welcomed by the various consumer bodies. The CAB Service says that it welcomes the proposed functions to enable the OFT to approve and withdraw approval for consumer codes of practice, but, with a sting in the tail, it then says that the OFT should be able to monitor the effect of the codes of practice. I hope that that is inherent in clause 8. The OFT says that the provision should result in much more consumer confidence in trade associations' codes of practice. A similar point is made by the Consumers Association, which particularly welcomes the powers given to the OFT in respect of industry codes of practice. Consumers often rely on logos and their codes as a reassurance that they are selecting a reputable firm. Unfortunately, some codes of practice are purely cosmetic and offer little consumer protection. We all know from our duties as constituency Members how elderly folk can be taken in by the flamboyant logo on the side of a van that purports to say that the firm is a member of an organisation–an organisation probably set up by the company. In fact, such practice carries no guarantee of competence or honesty. 
 The CBI, too, welcomes the new powers in principle. It said that self-regulatory codes can play a key part in giving consumers confidence when purchasing goods and services. It looks for further discussion with the OFT on the framework and the principles by which the codes will be judged, and says that it is essential that the scheme is well resourced and promoted. 
 On a final note, and expressing slight caution, given that the OFT also has the power to withdraw support for the codes, I assume that a practical system will need to be worked out–it is not a matter for the Bill–whereby due notice is given and due discussion will take place before it happens. Nevertheless, the provision is thoroughly useful and helpful, and it has our full support.

John Pugh: I want to make a technical point that I am sure my hon. Friend the Member for Twickenham (Dr. Cable) would have made. We are in favour of having good codes and of having the Ministerial imprimatur on them. They are extremely sensible and decent suggestions. I listened carefully to what the Minister said about which codes would be approved. I wrote down that she said that only codes that regulate members of organisations will be approved. I am sure that she is right, because a code used for guidance only, or one that will not be adhered to or implemented, is not the sort of code that Ministers would wish to authorise.
 However, subsection (4) states: 
''A consumer code of practice is a code of practice . . . which is intended to–
(a) give guidance to persons engaged in production or supply of goods or the supply of services''–
 then there is the word ''or''– 
''(b) regulate the conduct of persons so engaged''.
 I suggest to the Minister that that is a technical error. Following the thrust of her remarks, ''or'' should be replaced with ''and'', because there is clearly no ministerial intention to approve codes that do not regulate the people to whom they apply. That sort of technical change would make the measure more worthy of support.

Mark Field: I, too, shall speak briefly. Like my hon. Friend the Member for Eastbourne, I am in principle supportive of the clause. I certainly support the idea that we should use codes of practice instead of ham-fisted regulation, but I offer one word of warning. If the codes of practice are to be self-regulatory and in the hands of some trade-related body, it is important that there is sufficient will to enforce them.
 That concern arises from my own experience. If trade associations require some sort of subscription income from their associate bodies, they may prove reluctant to come down hard on offenders against codes of practice. I accept that the Government should not necessarily take a hard regulatory stance, but consumers may find themselves disappointed if certain codes of practice are not properly enforced. The biggest offenders may happily sign up to the code of practice, knowing that it will not be enforced at all, 
 and the protection given to consumers would be at best illusory.

Jonathan Djanogly: I fully support the clause, as everybody else does, on the ground of identifying reliable suppliers. I also support the provisions on fee monitoring. It is all good news. I have not studied any of the 42 codes and 24 sectors, as mentioned by my hon. Friend the Member for Eastbourne. I am sure that they are all highly reasonable and were worked out in close co-operation with the relevant trade bodies. If I were to have a concern, it would relate to the potential for the introduction of unreasonable codes.
 An unreasonable code might be introduced if a large company, perhaps one with strong lobbying powers, persuaded the powers that be at the OFT that the code should be made more stringent–perhaps more than was necessary. Small businesses would lose out because of the additional costs of complying with new regulations or dealing with code-compliance issues arising from that. In what sense will there be an ongoing review of the codes from the point of view of small businesses and the consumer, who would pay the costs of any extra regulation?

Melanie Johnson: I shall first respond to the hon. Member for Southport on the use of the word ''or'' between subsections (4)(a) and (b). We will consider that point and perhaps come back to it on Report.
 Having listened to the hon. Gentleman's remarks and those of the hon. Member for Eastbourne and other Opposition Members, I welcome the Committee's strong support for the codes regime and its valuable role in protecting consumers. I agree strongly with many of the remarks made. It will be part of the compliance mechanism and the OFT core criteria to ensure that the codes are properly enforced. Perhaps I could briefly explain some of the changes that are taking place. 
 The OFT has a new approach to codes, which takes the form of a two-stage process. The first stage requires code sponsors to satisfy the OFT that their codes meet the criteria. That relates to the point about individual businesses, because it is for sponsors of codes, which are likely to be representative bodies of one kind or another, to satisfy the OFT. Once sponsors have demonstrated that their codes meet the criteria, the OFT will publish a list. At that level, there will be no independent check on how well the codes work, so the OFT will not be approving the codes, but, at the second level of consideration, the OFT will publicly endorse codes where sponsors can prove that they have delivered on their initial promise. That endorsement is comparable to the proposals in the consumer White Paper and will probably include a mark or logo signifying OFT approval. The OFT will need to promote the regime and its core criteria, and to publicise vigorously the benefits of the scheme in order to persuade businesses to sign up. I hope that I can assure hon. Members that the codes are important, that the role of enforcement is adequately recognised and that we will not accept unreasonable codes. 
 Question put and agreed to. 
 Clause 8 ordered to stand part of the Bill. 
 Clause 9 ordered to stand part of the Bill.

Clause 10 - Part 2 of the 1973 Act

Question proposed, That the clause stand part of the Bill.

Melanie Johnson: The clause repeals most of the provisions of part 2 of the Fair Trading Act 1973. Part 2 of the FTA was designed to deal with novel unfair trading practices as they emerged. It allowed the Secretary of State, by way of secondary legislation, to prohibit or modify unfair, but not illegal, trade practices that harmed the economic interests of consumers. The Secretary of State would make those orders on the advice of the Director General of Fair Trading and a then newly created consumer protection advisory committee.
 Part 2 has barely been used. Only three orders have been made under it. The consumer protection advisory committee, on whose report the order-making power is dependent, has not existed in practice since 1983. Two of the orders made under part 2 are still in force and in everyday use by trading standards officers. The clause ensures that they are retained, together with the enforcement provisions for them. The rest of part 2 is repealed by the clause. 
 The order-making power under part 2 was found to be rigid and the process took too long. Specifically, it proved difficult to satisfy the legal tests in part 2, particularly the test of attributing specific consumer economic detriment to practices that were clearly undesirable. The possibility of reforming part 2 to make it easier to use has been considered at length. However, it has proved extremely difficult to identify the circumstances in which a revived part 2 might be used in the future. In any case, the Bill significantly strengthens consumer protection, and we therefore see no need to keep the provisions in part 2–other than those that I have mentioned–on the statute book.

Nigel Waterson: We agree with the wisdom of repealing part 2 of the 1973 Act. The issue, which we shall consider in more detail later, is what to replace it with. We appreciate that some of the powers have fallen into disuse and that the committee seems to have fallen off its perch, as no one has seen hide nor hair of it since 1983. Clearly, something had to be put in its place, but there is a great debate to be had–perhaps not now–about where clause 202 takes us.
 As the Minister will be aware, a campaign has recently been started by the National Consumer Council and various other leading consumer bodies, pushing for the duty not to trade unfairly. I appreciate that there are many arguments to be had about the scope of that, its practicality and its impact on other areas of English law. I do not want to open up such a debate today; we shall say more in due course. However, it is important to put down a marker about the fact that there is significant disappointment among consumer bodies that, although we are getting rid of part 2 of the Fair Trading Act, its proposed replacement is not man enough to do the job–if that is not a politically incorrect way of putting it. 
 As I said at the start of our proceedings in 
 Committee–it feels like a long time ago although it was only this morning–the opportunity to reform consumer legislation seems to come round on a 30-year cycle. Let us do our best to grab the opportunity in both hands. We shall not vote against clause 10 for the reasons that I have mentioned. However, I should not like the Minister to take that as approval–there is a great deal of debate to be had.

Harry Barnes: I am also interested in the question of where powers go. I raise it now because of the points that have been made by the hon. Member for Eastbourne. It would be helpful to discover whether the measures have fallen off their perch altogether, whether they are covered by a complex clause later in the Bill, or whether they have been hived off to the new Office of Fair Trading. That is a further marker for the future.

Melanie Johnson: I acknowledge the interest in the issues raised by the repeal of part 2 of the Fair Trading Act. We shall have a fuller debate later in the Committee's proceedings.
 Question put and agreed to. 
 Clause 10 ordered to stand part of the Bill.

Clause 11 - Super-complaints to the OFT

Nigel Waterson: I beg to move amendment No. 17, in page 5, line 3, leave out ''feature, or combination of features, of'' and insert
''agreements between undertakings, decisions by associations of undertakings, or concerted practices in''.

Nigel Beard: With this we may discuss the following amendments: No. 18, in page 5, line 4, leave out from ''services'' to end of line 5 and insert ''prevents, restricts or distorts competition''.
 No. 24, in page 5, leave out lines 31 and 32.

Nigel Waterson: We have reached one of the more exciting parts of the Bill. [Interruption.] I notice a ripple of excitement among Labour Members, particularly from the hon. Member for South Ribble. I am sure that we shall have a lively debate.
 The arrival of the super complaint must have seemed like the arrival of gunpowder and cannons to the proprietor of a medieval castle–alarming and impressive at the same time. It is, on paper, an extremely powerful weapon, which could change the balance of power–I do not want to get too carried away or I shall sound like David Starkey–between consumers and business. Like all powerful weapons, it must be handled with care. That is why we have tabled a number of amendments; they express our concerns, queries and probing ideas and those of business about how it will work in practice. 
 I should like to make a point that might be of help. Our general approach will be to seek fairly wide debates on groups of amendments, but to dispense with a stand part debate unless no amendments to the clause have been tabled. Even then, we might not have a stand part debate if the clause does not warrant it. 
 However, because this clause is such an important part of the Bill, we might want to say something about the stand part aspect of it even after we have dealt with the amendments. 
 When the Department is preparing its press releases about how wonderful the Bill is, the provision for super complaints will be one bit that ends up in the first paragraph. The concept of super complaints is widely welcomed by the consumer organisations. We are keen for it to work in a way that delivers for consumers but does not cause massive problems and disruption for legitimate business. 
 The wording of amendments Nos. 17 and 24 replicates the wording in article 81 of the EU treaty and the chapter 1 prohibition in the Competition Act 1998. Without such replication, it seems to us and to organisations such as the CBI that there is a risk of inconsistency and uncertainty. There is also the possibility that a new and unnecessary additional standard could be introduced into the UK competition regime. I do not know whether that was what the Department had in mind when it drafted this part of the Bill, but we want to find out through these probing amendments. 
 Amendment No. 18 would delete the wording 
''is or appears to be significantly harming the interests of consumers''
 and replace it with the phrase 
''prevents, restricts or distorts competition''.
 That would again replicate wording in article 81of the EU treaty and the chapter 1 prohibition in the 1998 Act. It is again a question of consistency and certainty and the concern is again that a new and additional standard is being introduced into the regime. Anti-competitive behaviour almost by definition harms consumers, so is there any real need to refer to them explicitly? 
 That is the reasoning behind the group of amendments. They are more probing amendments than anything else, but I would be interested to hear the Minister's response to them.

Melanie Johnson: The amendments would narrow the definition of a super complaint by placing the emphasis on conduct connected to breaches of chapter 1 of the Competition Act or article 81 of the EU treaty rather than broader problems in the market that may harm the interests of consumers. Our intention is to ensure that consumers receive better protection by enabling consumer bodies to complain about any market failure that causes significant harm to consumers. In order to do that, we need a broad definition of the circumstances in which a super complaint can be made.
 Using the language of the Competition Act, as suggested in the amendments, would narrow the focus of the procedure to the potential investigation of anti-competitive agreements. The new super complaints procedure is intended to ensure that the OFT is made aware of as wide a range of markets that are not working well for consumers as possible–not just those markets where competition concerns arise. Taken by 
 itself, without amendment No. 17, amendment No. 18 would mark super complaints out as a preliminary to OFT action under its competition law powers, such as those under the Competition Act, or through a market investigation. It would not be allowed to act under its consumer protection powers. 
 Consumer bodies and anyone else who wants to complain about basic infringements of the Competition Act can already do so. Super complaints should not be limited to a preliminary to a particular type of competition investigation. They should be an open-ended vehicle for the OFT to launch investigations under any of its consumer and competition powers. By, effectively, excluding the possibility of a consumer-side action as a follow-up to a super complaint, the amendment perpetuates the division between the OFT's competition and consumer sides, which the Bill is trying to break down. The amendment would make it very difficult for consumer bodies to submit super complaints. As third parties, they are unlikely to know much about the agreements that firms have entered into between themselves. 
 The hon. Gentleman said that these were probing amendments. I hope that with that explanation I have encouraged him not to press them to a Division.

Jonathan Djanogly: I support this group of amendments. The question arises whether a clause that is, on the face of it, well meaning will give companies comfort that they will not be subject to witch-hunting by consumers or pressure groups. There is a balance to be struck here, as with other parts of the Bill.
 I was slightly concerned by the Under-Secretary's statement that the measure was to be left as ''an open-ended vehicle'', as that seems a dangerous way of proceeding in what could be a litigious area. I accept the suggestion that we need a clearer definition of what can and cannot be investigated. Amendment No. 18 ties that down by referring back to article 81. 
 As the Bill stands, a super complaints procedure applies when the interests of consumers appear to be harmed, but what does that mean in practice? Who decides, and on what basis, what is best for consumers? Would it be consumer groups, for example? The CBI pointed out that that gives much too narrow a base; anyway, what would represent a consumer group for the purposes of the Bill? The new standard will lead to an awful lot of litigation, with costs being passed on to the public; to consumers, in other words. 
 There was a recent example of such a procedure in action. In October 2001, the OFT agreed to a Consumers Association referral to undertake a super complaints procedure, although at the time that would have been done only on a trial basis because the legislation did not exist. The case was brought against the dentistry profession. 
 In January 2002, the OFT announced that it would undertake a full investigation, which it expected to finish by the end of the year. It would have been helpful to the Committee if the investigation had been finished by now, because we would have had a better opportunity to analyse how it worked in practice. Unfortunately, that opportunity is unavailable. 
 Several questions surround that investigation, however. One might ask if the expected date was fair, but I shall not discuss dates as that subject arises in a later batch of amendments. 
 I mention the case now because it has an interesting aspect in relation to the Bill. When one reads the Consumers Association briefing on the state of the process so far, two basic reasons are given for the referral, as identified by the excellent magazine, Which? The first relates to transparency in charging, which certainly makes sense as the basis for an investigation. The second was more interesting, as it related to huge disparities in tariffs between dentists. That is an interesting concept, which seemed strange to me when I first read it. 
 I understand why the Consumers Association might want to point out why high-charging dentists should be avoided and to say who is a high-charging dentist, so that consumers know whom to avoid. However, when one considers competition issues, one normally looks for competition abuse, a convergence of price, people organising cartels or undermining consumers by maintaining a close series of prices. In this case, however, the Consumers Association is complaining about a massive divergence of prices, which is the exact opposite of the competition test. That brings us back to the essence of super complaints and the new rationale. 
 The Consumers Association is obviously looking forward to the time when the legislation is in place and it can run clear of the competition rule and start creating a new area of law. I do not know what the Consumers Association wants–perhaps some sort of 1970s price-capping policy–but it has nothing to do with competition.

Nigel Waterson: My hon. Friend is developing a fascinating line of argument, which we might reconsider during the stand part debate. If one expects the same standard of product, there might be an argument also for expecting the same price, although there is always the question of regional variations. Is a dentist or a plumber expected to give a standard service? Presumably, some dentists, like some plumbers, are better than others and may warrant a higher fee. I am sure that my hon. Friend was coming to the issue of consumers being able to shop around and ask more than one dentist what he or she charges, but many people would be in the dentist's chair, anticipating the pain, and would not think about the price until afterwards. That is their prerogative. This is a fascinating discussion.

Jonathan Djanogly: It is indeed. When Which? looks at prices, especially of services–such as those provided by dentists or lawyers–there are often more considerations relating to price, such as the service that the consumer receives. Of course, I congratulate the Consumers Association on advising consumers of the various prices and telling them where they can get a cheap deal, if that is what they want, but that is a different issue.
 I am not trying to pre-empt the OFT inquiry into dentistry. I am taking my information from the 
 Consumers Association briefing paper, as I have not seen the OFT report, but that information is backed up by a recent briefing from the National Association of Citizens Advice Bureaux. To return to the issue of what are legitimate grounds for a claim, the Consumers Association seems to be starting a new industry, in which it, rather than the law, tells us what is right and wrong for consumers. The briefing paper says 
''As we understand it, it would be possible for a designated body to make a complaint on the grounds that a particular trader is conducting his business in a manner which is unfair and detrimental to consumers. This could encompass engaging in practices and sales techniques which are not presently illegal but are nevertheless unfair and harmful to consumers. Our concern is whether in these types of case the OFT would have any powers to act, if the complaint was found to be unjustified.''
 In other words, even though a practice may not be illegal, NACAB wants it to be possible for the practice to be referred to the super complaints process. I wonder how many hon. Members appreciate that that is what we are talking about, because it is a dangerous proposition that consumer associations should take the lead in dictating what is illegal. We heard earlier that we should, perhaps, be considering what other bad trading practices should be made illegal. That is a valid argument, but I have significant concerns that, even before they get the powers, consumer associations are saying that they, not Parliament, should decide what is illegal. That is something that the Committee should consider carefully. 
 The size of the offence is relevant to mergers. There is a de minimis provision; in other words, if a complaint is below a certain level, it will not be dealt with under the Bill. However, I believe that that does not apply to clause 11. I ask the Under-Secretary for clarification, but if I am right, no complaint would be too small for the OFT to consider. It would have been sensible, as with the merger regulations, to have a level below which it was considered that the regulations should not apply.

Harry Barnes: The Oxford philosopher and great socialist thinker G.D.H. Cole wanted to transform Parliament into two Houses, one of which would be a House of consumers and the other of which would be a House of producers. They would have equal and co-ordinate powers. I wonder whether the provision on the super complaints procedure for consumers should not be mirrored by a super complaints procedure for producers, or workers.

Mark Field: I shall not comment on the contribution of the hon. Member for North-East Derbyshire, not least because it would take me a long time to get my head around the idea.
 The clause is extremely important. It is at the core of many of the concerns that we shall discuss on other amendments; if not this evening, at some time on Thursday. My hon. Friend the Member for Huntingdon pointed out to me one of the great fallacies in connection with price in competition or monopolistic power. It is that if we have perfect competition or a monopoly, logic and economic theory dictates that the price will be exactly the same. It is therefore difficult to make a coherent case 
 that price should be the determining factor for competition ills. 
 The CBI suggests equality of treatment and that the Government should hear all complaints equally. The concept of a super complainant procedure is cause for great concern, because people will assume that complaints have substance if they are put forward by a consumer group on that elevated scale. It seems that complaints will automatically get over the first hurdle if they are made by a super complainant. If legislation is to work properly, it is essential that it should treat all people in the same way. A complaint from a super complainant should be made as if it had come from an individual or another company.

Melanie Johnson: I shall endeavour to sum up this diverse debate and answer all the points raised on the subject. First, it is important to reflect on why we are going along this path. It is rather difficult for individual consumers to identify market failure, market abuse and bad market practices of one kind or another. It is important to bear that in mind when considering the issues raised today.

Mark Field: Surely that is counter-intuitive with regard to events of the past 20 or 30 years. Those who have been Members of Parliament for any length of time–and Ministers, too–must have dealt with an enormous number of individual complaints. In a sense, the consumer has become liberated and is able to make complaints. The worry is that consumers may not know the most appropriate way to make those complaints, but the idea that they are powerless and require a super complainant body surely runs in the face of experience.

Melanie Johnson: I take it that the hon. Gentleman is referring to our experience as Members of Parliament. Obviously, in representing people, we see many difficulties in various aspects of their lives. I accept that we have a wider view from that perspective, but the individual consumer has their own experience of engaging in the market and buying goods and services. However, although they may have access to the informal experience of others, they do not have that wider view. We are considering super complaints in that context.
 A concern is floating around that people may make frivolous super complaints and that organisations that are authorised to act in this capacity–that will be a careful process in itself–will come forward with something that is not sensible. I can assure the Committee that organisations will be expected to base their complaint on a reasoned case. If they do not, the OFT will take no action beyond initial consideration. Equally, the OFT must publish its reasons for what, if any, action it proposes to take. The process cuts both ways; the OFT is held to account, and groups will submit reasonable super complaints because they will not want to end up with 
 bad publicity and damage to their reputation. That is a crucial part of their credibility with consumers and the wider public.

Jonathan Djanogly: The Under-Secretary says that consumer groups will not want to lose their good image. It would be helpful if she could explain what she means by ''consumer groups''.

Melanie Johnson: I am talking about any group that is authorised to act as a super complainant and is recognised as a potential super complainant. There will be criteria for that. We do not expect any group to act in that way; the groups will be designated. That designation will involve their demonstrating responsibility and certain other capacities for making such complaints.
 I should now like to wrap up the debate, and I will take no further interventions if possible. The OFT will issue guidance on the substance of the complaint. That is about markets, not individual businesses, so we are not covering trivial complaints. On the competition side and the question of complaints where practices are not yet illegal, the result could be market investigations to order by the Competition Commission to stop anti-competitive practices in a particular industry. On the consumer side, there could be codes of practice to enshrine best practice. However, the OFT is not a law maker. Significant harm must be done to consumers before the OFT will decide what, if any, action to take, and that action must be based on that complaint. 
 The OFT can determine which of its competition or consumer points it should use if necessary. The complaint must be reasoned, and as I said the OFT must publicise its response. The whole process is open, reasoned and founded on OFT duties on behalf of consumers and business. I can reassure hon. Members who have contributed to the debate that the issues will be taken forward on those terms by super complainants and the OFT. 
 I find it hard to answer the point made by my hon. Friend the Member for North-East Derbyshire, because it requires a great deal more thought than I can give it at the moment.

Nigel Waterson: I am thoroughly looking forward to the amendments that the hon. Member for North-East Derbyshire will no doubt table on this novel idea. We will doubtless have some interesting debates on them in due course. The amendments were probing. We tabled other amendments to clause 11, which is an important clause for consumers and business as it seeks to ensure that everyone understands how the new mechanism will work. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Further consideration adjourned.–[Mr. Pearson.] 
 Adjourned accordingly at Seven o'clock till Thursday 18 April at half-past Nine o'clock.